INTRODUCTION TO A SYMPOSIUM ON FISCAL STRESS, BUDGET CHOICES AND CUTBACK MANAGEMENT.

Author:Desai, Uday
 
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INTRODUCTION

Over 35 years ago Charles Levine predicted that governments in the U.S. were entering an era of resource scarcity (Levine, 1979). While overall budgets at all levels of government in the U.S. increased over this period (the federal budget, doubling, for example, in the 30 years between 1975 and 2005 (DiIulio 2017), there have also been periods of severe resource scarcity, especially at the state and local levels. During the two recessions just in the last 15 years, state and local governments have faced significant declines in revenues (Maciag and Wogan, 2017).

Most state and local governments in the U.S. are required by law to have a balanced annual budget. Declines in revenues as a result of a recession usually create fiscal stress for state and local governments. Sometimes, as in the case of the last recession of 2007-2009, the federal government may provide some temporary fiscal resources to state and local governments. However, such relief is usually rather modest and short-term. And, since recessions are a regular feature of the U.S. economy, state and local governments can reliably expect recurrent periods of fiscal stress.

Most basic services, from education, roads, public transportation, sanitation, parks, recreation, and libraries, to law enforcement, fire protection and criminal justice services, are provided primarily by state and local governments in the U.S. While the federal government often provides some financial resources to the state and local governments, the primary responsibility for the provision of these and many other services rests with state and local governments. Recessions and resulting declines in revenues, combined with the requirement that state and local governments balance their budgets annually, regularly create significant fiscal stress for them. Understanding how state and local governments respond to and manage that fiscal stress is important for understanding government decision making in the U.S.

There were a number of academic public administration studies of the responses of state and local governments to resource scarcity and the resulting fiscal stress in the 1980s and the 1990s. However, there have been "only a handful of new contributions" since then (Bozeman 2010). It is time once again for academic studies of how state and local governments respond to and manage fiscal stress in an era of recession and resource scarcity. This symposium contributes to a small but growing number of...

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